Xcel Energy’s proposed $159 million electric-rate increase — an effort at recouping investments it has made toward improved service — will be followed by another rate-hike request, according to the utility.
The amount Xcel seeks from the second request is not yet public; neither is its impact on electric bills. However, an Xcel spokesman said the company would file the proposal around May 1 — just as the Colorado Public Utilities Commission finishes hearings on the first one.
“Utilities request rate increases for three things: large customer growth, new power plants or new transmission lines,” said Wayne Shirley, a director at the Regulatory Assistance Project, a nonprofit in Montpelier, Vt.
Hearings on the first proposal begin today at the PUC offices, 1560 Broadway.
If approved, base residential rates will jump by $4.50 a month and the base rate for small businesses will jump by about $7 a month as early as July.
Xcel says the requests are justified, given that it’s invested more than $1.7 billion in its Colorado operations since 2006. Most of it was for Comanche 3, a new coal-fired power plant in Pueblo that’s expected to go online this year.
Also, Xcel built two natural-gas plant units in Fort St. Vrain, put up transmission lines and installed equipment to improve its electric service.
“Despite the current economic conditions, we believe that in the long term, as the economy recovers, our customers will find that these additions were a wise investment for the state,” Xcel spokesman Mark Stutz said.
In the past, utilities recouped the costs of construction after the project was operational, taking years to earn it back. Now, utilities seek rate hikes for new projects before they’re even in service, allowing for new ones.
“Sometimes, utilities go through growth cycles, as was the case in the 1980s when there were many rate cases,” said Shirley, former chairman of the New Mexico Public Utility Commission. “Today, rate cases are coming back after the 1990s, when there was a lull because of excess capacity and demand wasn’t growing.”
Some see it as too aggressive an approach. Several activist groups said they will rally at today’s PUC hearing.
“It’s unbelievable,” said Nancy LaPlaca of nonprofit Clean Energy Action. “I don’t remember back-to-back rate cases. Is this what we are looking at in the future?”
Gargi Chakrabarty: 303-954-2976 or gchakrabarty@denverpost.com
